Greece’s rebel MPs told to accept bailout terms

The Greek government has told rebellious MPs to back a deeply unpopular euro rescue package or send the nation down “an unknown, dangerous path” to default and international economic isolation.

The deputy finance minister, Filippos Sachinidis, said the consequences of failing to accept the bailout terms were “incalculable” for the country.

“Let’s just ask ourselves what it would mean for the country to lose its banking system, to be cut off from imports of raw materials, pharmaceuticals, fuel, basic foodstuffs and technology,” he said.

The warning came as a 48-hour protest strike went into its second day.

About 50 Communist party activists draped two huge banners on the ramparts of the Acropolis, reading: “Down with the dictatorship of the monopolies (and the) European Union.”

Up to 7,000 demonstrators gathered in central Athens, police said, but there was no repeat of the trouble on Friday when police fired teargas at protesters throwing petrol bombs and stones.

Greece is facing an acute political and social crisis as the bankrupt state prepares to decide whether it can stay in the single currency.

Five ministers have so far resigned in protest at the scale of the spending cuts demanded in return for the new €130bn (£108bn) bailout.

Evangelos Venizelos, the Greek finance minister and socialist leader, said the country had until Sunday to choose whether to take the eurozone medicine of more cuts – or default on its debt next month and be forced out of the single currency.

He said: “The choice we face is one of sacrifice or even greater sacrifice – on a scale that cannot be compared. Our country, our homeland, our society has to think and make a definitive, strategic decision. If we see the salvation and future of the country in the euro area, in Europe, we have to do whatever we have to do to get the programme approved.”

Conservative leader Antonis Samaras has attacked austerity policies for driving Greece ever deeper into recession, yet he still told his party to back the euro deal or be dropped as candidates in the next general election.

Sachinidis added: “The consequences of disorderly default would be incalculable for the country – not just for the economy … it will lead us onto an unknown, dangerous path.”

The prime minister, Lucas Papademos, had offered new austerity measures worth €3.3bn to secure the euro lifeline, but he was told the cash would not be forthcoming until savings of an additional €325m were identified. He was told to get the €3.3bn programme endorsed and come up with a plan for the new cuts – to plug a gap in this year’s budget – by Sunday.

George Karatzaferis, a Greek coalition leader, spoke of national humiliation and said he would not accept the new cuts, adding that Greece was labouring “under the German boot”.

In Germany, Angela Merkel was reported to have warned her centre-right MPs of “uncontrollable consequences” for the eurozone should Greece become the first euro nation to declare sovereign default on its soaring debt. Her finance minister, Wolfgang Schäuble, told the same MPs, according to reports in Berlin, that Athens’ latest pledges over spending cuts fell well short of what was needed.